State Regulator Issues Cease & Desist Orders, Subpoena For Accounting Books & Records Against Austin-Area Real Estate Operators Accused Of Targeting Dozens Of Unsophisticated Latino Homebuyers w/ Contract For Deed/Rent-To-Own Deals Loaded w/ Onerous Terms, Unaffordable Balloon Payments

In Austin, Texas, the Austin American-Statesman reports:

• A state agency has issued cease and desist orders to an Austin real estate group that several dozen Dove Springs residents blame for deals costing neighbors their homes.
  
  The Texas Department of Savings and Mortgage Lending issued the orders to HomeTex Enterprises and Jeff Evans, who is listed as its property director, and who residents say lured them into unfavorable housing contracts. The department also ordered another mortgage firm flagged by residents, the Lending Group LLC, to turn over records.
  
  About 40 to 45 homes in the Dove Springs area are believed to be involved in the deals. According to the complaint in a 2014 foreclosure lawsuit involving a Round Rock couple, the real estate group manages a portfolio of more than 300 houses and duplexes in Central Texas.
  
  An attorney for Evans could not be immediately reached for comment.
  
  Austin civil rights attorney Brian McGiverin said he and other lawyers representing the residents are pleased to see progress in the inquiry. The dredging up of documents could help uncover wrongdoing, he said.
  
  “I think the department has gathered as much as it could from speaking to residents,” he said. “The subpoena (against the Lending Group) will get at their books and record keeping, and it is the next full step to flesh out a full picture about how they have been operating.”
  
  Lawyers with Texas RioGrande Legal Aid have said a rotating cast of four firms, all owned and controlled by the same people, targeted Latino and Spanish-speaking buyers in the Southeast Austin neighborhood, many of whom didn’t qualify for traditional loans.
  
  Legal aid attorneys allege the group took advantage of an informal sales process — buyers were often unrepresented by a real estate agent, title company or attorney — and signed people up for financing packages that included large balloon payments.
  
  Some buyers told lawyers they did not realize a payment for the remaining balance on the home would come due within a few years, while others believed the balloon payment would be far lower than it turned out to be. In some cases, according to attorneys, homeowners were promised a chance to refinance balloon payments but were then denied at the critical moment, resulting in default.
  
  Residents began organizing against the firms in October, and the home deals have attracted the attention of several state and local officials including state Sens. Kirk Watson, D-Austin, and Judith Zaffirini, D-Laredo, and Austin City Council Member Delia Garza, who represents Dove Springs.

Source: State ramps up inquiry into Dove Springs mortgage complaints. land contract